Mortgage Rates Take A Break

While interest rates seem to dither, neither going up nor down, the market holds its breath and wonders what the Fed will do next.

According to Realty Times, last week's Freddie Mac survey showed that interest rates are virtually unchanged from the week before. All eyes are on the next meeting of the FOMC, and whether the Fed believes that inflation is in check. In fact, what the Fed says for its long term outlook will be even more important than whether interest rates actually change. Why? Because the Fed can set the atmosphere for the next few months, and what the Fed says, many will believe.

The more that believe what the Fed says, the more likely the Fed will be right.

Funny how we can all be so completely obsessed with interest rates. While rates have been going up, they are still at historic lows relatively speaking. I know people who had mortgages in the 80's and 90's that had double digit interest rates, and still considered their mortgages a good deal. We've all become much more sensitive somehow to the interest rate on our mortgage; and yet, we don't seem to notice that our credit cards can have interest rates over 30% on outstanding balances.

Credit card interest rates don't pay any attention to the Fed.

Perhaps we should pay more attention to our small debts that have big interest, as opposed to our big debt that has small interest. After all, when our mortgage is paid off, we'll have a valuable asset and the equivalent of money in the bank.